What gives? Charitable foundations struggling in Maine, report says

Poll

PORTLAND, Maine — For many people, a stagnant economy, stock market declines and increased unemployment have made money pretty tight the past few years. With less disposable income around, charitable organizations now are feeling a philanthropic pinch.

Giving by all 327 charitable foundations in Maine that are registered with the Internal Revenue Service decreased 6 percent between 2008 and 2009, from $133 million to $127 million, according to figures released last week in an annual report by the Maine Philanthropy Center.

“It’s probably more a case of it being a spike in 2008 than it is a precipitous drop in 2009,” said Janet Henry, Maine Philanthropy Center’s president.

That’s not to say Henry is expecting a sudden turnaround.

“No, because we’ll likely see that [giving] continue to go down,” she said. “Things vary year to year. If I look at our 2010 [report], I know we’ll see [more negative] numbers due to the economy. This is a snapshot year to year.”

Other findings in the report include:

• While Maine foundation assets have increased more than 200 percent since 2000, they experienced a 10 percent decrease from 2008 ($1.9 billion) to 2009 ($1.7 billion).

• Maine’s top 20 most active foundations increased their total assets from $1.1 billion to $1.4 billion, but reduced their overall giving from $91 million to $72 million and their giving in Maine from $66.6 million to $52 million.

• Giving to certain segments of society was up between 2008 and 2009, despite overall declines in funding. Donations to human services agencies rose from 24 percent to 29 percent. Arts and humanities went from 6 percent to 7 percent, while health care held steady at 17 percent.

The 28-year-old foundation created by executive Bob Blum of the New York-based Federated Department Stores, renamed Macy’s Group Inc. in 2007, is a philanthropic leader seeking to build sustainable and vibrant communities in Maine and beyond.

“Our mission is to work in partnership with donors in building strong communities locally and elsewhere in the state,” said Meredith Jones, Maine Community Foundation’s president and CEO. “We also make grants available to people outside the state who either are from here or live here at least part time.”

Since its creation in 1983, the Maine Community Foundation has awarded almost $150 million in grants and seen its assets go from $10 to approximately $280 million held in stewardship for more than 1,300 different funds.

Jones said her foundation’s asset growth is broken into two components: gifts, principally from individuals, and investments.

“We’ve gone from $18 million in gifts in 2008 to $23.7 million in 2009, $29.3 million in 2010, and so far this year we’ve added $16 million,” said Jones.

The Maine Community Foundation allocated 81 percent of its $15,654,944 total giving in 2009 to Maine nonprofit groups and municipalities in the form of individual scholarships or grants.

Jones credits three factors for her foundation’s ability to buck the financial trend that has decreased other foundations’ assets. The foundation’s assets increased more than $35 million from 2008 to 2009.

“We have a crackerjack group of volunteers who make good investments, we provide services to donors that you don’t necessarily get from other foundations, and also the relevance of our program activities that are of particular importance to Mainers,” Jones said. “It does feel good to be ranked first, but that just goes to show the nature of the kind of foundation we are.”

“The other piece of this report that’s amazing to me is the foundation giving in Maine,” said Henry. “Maine getting $11 million from national foundations is significant. What that tells us is there’s an increasing opportunity for local foundations to partner with statewide and national ones to better and more effectively spend their grant money.”

This dovetails nicely with one of the Maine Philanthropy Center’s primary goals, which is acting as a liaison to partner national foundations with local ones based on areas of interest and help them work together.

“You can invest dollars, but you still have to ask what the outcome of that is. We want to facilitate not only giving, but giving with the most impact,” Henry said.

Especially now, when money is tight all over.

“It fluctuates, but all we’re seeing now is increased engagement the last few years through a desire to have greater impact with their dollars,” said Henry. “The local [foundations] know where money can best be spent, where the needs are and who the contacts are. It can really help ensure the funds are best utilized and spent where they can do the most good.”

Henry said money from foundations makes up only about 10 percent of donations to nonprofits. Another 75 percent to 80 percent comes from individuals, and government funds cover the remaining 10 percent to 15 percent.

Despite the bleak numbers in the latest report, Jones remains optimistic — for good reason, she says.

“You’re talking to an eternal optimist, but I think there is” reason for optimism, said Jones. “I think it’s part people having disposable income and I also think it’s people’s confidence in the future. So when they’re worried about the economy or their financial situation in the future, there’s more reluctance to part with money you may need in the future. We are seeing a turnaround in that thinking, though, according to a conversation I had with a Kennebec Valley United Way official. He said where 2008 and 2009 were terrible, 2010 started an upswing and this year is even better in terms of donations and gifts.”